About 1.5 million residents in Dhaka will benefit from improved sanitation services following the approval of a $170 million loan by the Board of Directors of the Asian Infrastructure Investment Bank (AIIB).

The Dhaka Sanitation Improvement project, co-financed with the World Bank, will support Bangladesh government's investments in sanitation infrastructure comprising sewerage systems, sewage treatment, and pilot measures for hard-to-reach areas in the Pagla catchment, one of the most densely populated areas of the city.

Children below the age of five and vulnerable households bear the highest burden of poor sanitation through morbidity and the loss of productivity due to water-borne illnesses, according to a press release from AIIB.

"AIIB is committed to ensuring that its projects improve quality of life for the most vulnerable communities. This project is expected to directly contribute to the achievement of Sustainable Development Goal (SDG) 6, which is to ensure access to water and sanitation for all," said AIIB Vice President, Investment Operations, DJ Pandian.

"The experience of implementing this project will strengthen AIIB's capacity to finance broad-based water supply and sanitation projects, which are in high demand in other areas of the region," he said.

The project funds will be used to reconstruct two trunk mains, build a new secondary and tertiary network and a wastewater treatment plant. Other key components of the investment include strengthening the capacity of the Dhaka Water Supply and Sewerage Authority and testing the feasibility of locally adapted collection and sewage treatment solutions.

The project is AIIB's eighth investment in the country, all of which are aligned with the country's top priority development plans and the SDGs. The approved project brings the Bank's total commitment in Bangladesh to USD 1.068 billion.